O REGON C ENTER FOR P UBLIC P OLICY. Boom, Bust, & Beyond

Transcription

1 O REGON C ENTER FOR P UBLIC P OLICY Boom, Bust, & Beyond The State of Working Oregon 2002

2 Boom, Bust, & Beyond The State of Working Oregon 2002 By Jeff Thompson Michael Leachman Oregon Center for Public Policy 204 North First Street, Suite C P.O. Box 7 Silverton, Oregon fax info@ocpp.org October 2002

3 Acknowledgements The authors would like to thank the following people for their support in creating this report: Peter Noordijk and Brendan Livingston, OCPP research assistants, for thorough data analysis; Chuck Sheketoff, Jacque Greenleaf, and John Lewis of OCPP for intensive editing; Vanessa Elkan, OCPP office assistant, for continued help; Bethney Gunderson, Jared Bernstein, and other staff at the Economic Policy Institute for making data available; Jim Branscome of the federal Agency for Healthcare Research and Quality for making data available; Ken Lux, Rick Hawes, Amy Vandervliet, and Kathi Riddell of the Oregon Employment Department for making data available; Kathy Pickle of the Oregon Health Division for making data available, and; Tom Potiowsky and Kanhaiya Vaidya of the Office of Economic Analysis for making data available. The Oregon Center for Public Policy would like to thank the following for sponsoring this report: Portland Impact Oregon School Employees Association Community Action Directors of Oregon Oregon AFL-CIO Labor Education and Research Center (University of Oregon) Oregon Education Association The Oregon Center for Public Policy would also like to thank the following for their ongoing support for our work: Ford Foundation Governance and Public Policy Program of the Open Society Institute Penney Family Fund Ralph L. Smith Foundation John and Martha Marks Fund of the Oregon Community Foundation The generous support of many organizations and individuals The OCPP is a part of the State Fiscal Analysis Initiative (SFAI) and the Economic Analysis and Research Network (EARN)

4 CHAPTER 1 Executive Summary Following the strong expansion of the 1990s, Oregon s economy fell into recession in While the 2001 recession was relatively brief, the recovery in 2002 has been weak. Whether the economy slides back into a double dip recession or continues a jobless recovery, the near future for working families in Oregon does not look bright. The long-term trends of widening income inequality, growth in lowpaying jobs, and declining unionization will likely shape Oregon s economy in the years to come. Using a wide range of economic data, Boom, Bust, and Beyond: The State of Working Oregon 2002 evaluates Oregon s economy from the perspective of its workers. It shows how workers in Oregon fared during the 1990s boom and in the recent recession. The report also discusses what workers can expect in the coming years, based on lessons from the economic recovery in the early 1990s and on longterm economic trends. Over the last decade, Oregon has experienced boom and bust, followed by a tentative and uncertain recovery. This report finds key lessons in each period of Oregon s recent economic history: Limits of the Boom Despite broad based gains during the late 1990s, the benefits of Oregon s expansion were distributed very unequally. Earnings, wages, and income all grew in the late 1990s, but the distribution of gains was highly unequal. The adjusted gross income of the richest one percent of Oregonians grew 98 percent between 1989 and 2000, while the typical Oregonians income rose just 9 percent. By the late 1990s Oregon had one of the most unequal distributions of income in the country. To achieve their income gains, the typical family worked 330 more hours per year in the late 1990s than in the late 1980s. Poverty among working families with children rose to 11 percent in , up from 8 percent in the late 1980s. O REGON C ENTER FOR P UBLIC P OLICY

5 2 Ch. 1: Executive Summary Impacts of the Bust While brief, the 2001 recession had real impacts on Oregon workers. Heavily dependent on high-tech manufacturing, Oregon s economy sank into recession when that industry fell on hard times. Unemployment rose, giving Oregon the highest rate in the nation for much of 2001 and After rising for a decade, the average annual earnings of Oregon workers declined 1.5 percent in The number and rate of bankruptcies in Oregon broke records, and mortgage delinquencies and foreclosures rose to levels not seen since the mid-1980s. Late-in-the-decade improvements in poverty have been halted by the recession. And Beyond Growth has returned to Oregon s economy, but it appears slow and similar to the recovery of the early 1990s. Whether Oregon falls back into a double dip recession or stumbles along in a jobless recovery, the economy should not be expected to generate earnings or income gains for workers. Oregon s economy was growing in the early 1990s, and job growth was strong by the mid-1990s, but earnings and income did not see real growth until late in the decade. It took a massive infusion of high-tech investment and an extended period of low unemployment to boost earnings and incomes in the 1990s. These factors will not return soon. Over the long-term, trends towards widening inequality, lower-paying jobs, and declining union coverage will likely dominate the well-being of Oregon s workers. If these structural factors in Oregon s economy are not addressed, the long-term outlook for workers in Oregon will not be bright. Boom, Bust, and Beyond: The State of Working Oregon 2002 also contains a great deal of data on other issues that are important to the well-being of Oregon workers: After improving in the mid-1990s, health insurance coverage of working-age Oregonians faltered in the second half of the decade. Uninsurance worsened among poor and non-poor working-age Oregonians alike. The increase in uninsurance among Oregon s fastest growing population Hispanics is particularly troubling. Rapid inflation in home prices over the 1990s transformed Oregon into one of the least affordable states in the country. Housing inflation settled down in the last years of the decade, raising the prospect that affordability might improve in coming years. Food insecurity and hunger among Oregon households was high in Fourteen percent of working adults in Oregon lived in households uncertain of their ability to meet their food needs, and five percent were in homes where at least one person went hungry at times during the previous year. Thirty percent of unemployed adults were in food insecure households, and more than one in eight unemployed adults lived in homes with hunger. O REGON C ENTER FOR P UBLIC P OLICY

6 Boom, Bust & Beyond: The State of Working Oregon Boom, Bust, and Beyond: The State of Working Oregon 2002 is a detailed story about how the changing economy over the last decade has impacted working people and their families. It is designed to stimulate public discussion and to encourage the reader to take action and to make informed decisions. As Oregon voters consider their choices in the coming years, and as legislators consider policies during the 2003 legislative session, Boom, Bust, and Beyond: The State of Working Oregon 2002 will be a useful resource to inform a variety of public policy debates. O REGON C ENTER FOR P UBLIC P OLICY